Another year gone, where does the time go? As the year draws to an end I find myself reflecting on the good, the bad and the ugly of the past 12 months and as I do so I reckon there are 6 key trends or issues that have set the context for 2021 and most likely will set the context for 2022 as well. Let’s look at these trends one by one.
COVID and the digital Workplace
“Who Led Your Digital Transformation? Your CIO Or COVID-19?” Peter High / Forbes
“COVID-19 have speeded the adoption of digital technologies by several years” McKinsey
In 2020 most organisations shed the office and introduced work from home (WFH) and remote working programmes. The push for this big change was COVID19 rather than some overarching strategy to redefine the “way we work” and because our approach was COVID inspired, what nearly all organisations delivered was a technology led implementation of tools that facilitated the possibility of working reasonably effectively away from the office.
It may seem overly harsh to criticise organisations for doing what needed to be done to ensure they survived through COVID however for most this crisis based response to COVID has meant that they have simply added technology based tools onto the existing ways of working. In some cases this is fine, in others this adds complexity in how teams operate and communicate and in nearly all cases it represents a missed opportunity to radically rethink entrenched ways of working within an organisation. COVID created a dislocation, a state of fluidity that could be taken advantage of to remove legacy ways of working and create a new modern workplace. While many businesses are heading back to their offices the opportunity still exists as COVID lingers and as employers react to growing employee demands for greater flexibility in the workplace. With some planning and forethought, employers can provide this flexibility by redefining jobs, how and what work gets done and at the same time position themselves to win the war for talent (more on this is the skills shortage section later) .
None of this is a silver bullet however, there are traps and issues to be sorted through. Chief among them is how do you maintain an effective working culture in an environment where everyone is remote. We often talk scornfully of the by chance watercooler conversations that occur in the office but we now know how important these conversations can be. How do you replicate that when remote?
There are ways, remote working is prevalent in some industries (eg global consulting firms and remote software development) but they are not the ways of traditional office bound organisations and how people interact needs to be rethought and perhaps planned (maybe not planned as such but “work” needs to be designed in a way that makes valuable incidental interactions as likely as possible).
Cyber Attacks Are Accelerating
The last 12 to 18 months have seen many high profile cyber attacks with regulators and everyday organisations being hit alike. The worst of these attacks cost millions to recover from and can ruin organisational reputations even if you do not pay the ransoms. If you are still giving cyber security the ostrich treatment it’s time to stop and start taking cyber risk seriously. Now let’s be clear, you are giving cyber security the ostrich treatment if:
- you do not have a formalised chief security officer role or equivalent (this could be inhouse or through a partner).
- you do not have formal and ongoing digital literacy and cyber security education programmes for your team, your customers and other key stakeholders.
- you do not have sufficient, specific, tagged funding to address current and emerging cyber security risks.
- you do not have an agreed external cyber security review and audit programme.
- You do not require your partners and customers to comply with appropriate external cyber security standards.
As you look at this list, are you really taking cyber seriously or do you have your head buried in the sand?
Skills Shortage
“Business is better than it’s ever been ….. If only there were candidates” an Auckland based recruiter
Our industry has been talking about skills shortages for just about as long as we have been an industry. But this past year has been different and in my estimation worse than I have ever seen it. There are many factors at play but we have a classic demand and supply crunch. Ongoing growth in our industry is seeing demand for skills increasing (we went past $10 billion in export earning for the first time), a lack of IT skilled immigrants, both experienced hires and entry level students have not been able to get into the country and our inability as an industry to make IT (and STEM in general) sufficiently attractive to our young adults means many open positions. As an illustration of this I recently searched Seek and they reported over 3,200 ICT job vacancies. They are just the jobs that are being actively recruited for, I know of some organisations who are just not bothering.
The skills shortage has started to be reflected in salaries and demands from IT employees for greater flexibility in the workplace. In one case I know of an organisation that was recruiting for a data analyst in the middle of this year. Initially they had trouble attracting candidates; the job was just not seen as attractive. Over time they secured their candidate but this was at a 25 – 30% premium to salaries 6 to 9 months earlier and with significant concessions to allow for flexibility on working hours and place of work (i.e. flexible working arrangements). This secured the candidate but the flexibility precedent has caused discontent and discussion with other staff members.
This case is not unusual, indeed it could be considered a conservative case. I know of numerous examples of people who have more than doubled their earnings, often working remotely in New Zealand for overseas organisations on overseas pay. This is a growing trend with tech companies from around the world recruiting in New Zealand. The global marketplace for IT talent is emerging quickly.
Finally, the skills shortage is having a negative impact on project delivery. I know many companies where projects are running late or had to be slowed down or simply canceled because they and their partners have simply not been able to secure the skills they need. Slowing projects is a big deal in many organisations as business cases set out time based benefits that the team is charged with delivering. Consequently many try and push ahead despite the skills gap raising the risk of failure in an industry where we already struggle to deliver our most critical projects effectively.
Transformation Remains Elusive
Over the past 5 plus years I have been privileged to be a judge on several key industry awards, most notably the CIO50 and the High Tech Awards. As a judge I get to see some of the best examples of leadership and innovation that our industry has to offer. The best of the best in these awards are inspiring and there are many examples of great digital innovation within traditional corporates and tech start ups alike. While the best of the best are inspiring the innovation demonstrated by the “middle of the road” entries are weak (note I would expect the middle of the road entries to be better than average as they have entered the awards after all). Some are delivering new digital ways to engage customers (that was leading edge 10 maybe 15 years ago in New Zealand) others are prototypes or pilots that haven’t scaled. A few are new offerings or interesting digital versions of existing services but virtually none are truly transformational or show obvious potential to be transformational in the future.
Of course it doesn’t help that we can’t agree on what we mean by “transformation”. To some every IT investment seems to carry a transformation tag for others to be transformational, we need to be aiming to change the very essence of the organisation, the organisational equivalent of the caterpillar to the butterfly (a metaphor I don’t particularly care for). If we cannot define what we are trying to achieve is it any wonder we have trouble delivering? Perhaps the start point of improving our success in transformation is forming a joint understanding on what we mean. This however is another blog entirely – watch for it in the new year.
Show Me The Data
”In God we trust. All others must bring data.” W. Edwards Deming
OK this isn’t exactly new in 2021. Edward Deming, widely acknowledged as the father of the total quality movement (TQM), was expounding the value of data and evidence driven decisions since the 1940’s and 50’s. While the tools we have available today to manage and use data are unrecognisable from Deming’s day the essence of the opportunity remains the same – how can we use data to add value to the organisation and our stakeholders?.
Explicitly leveraging data for value is what sets digital apart from all other “industrial revolutions”. The digital leaders are expert at it so much so that the 5 largest companies in the world today create all or a significant part of their organisational value by leveraging data, often our data.
For example see the table below. The 5 largest companies in the world are expert at leveraging (our) data for value.
Interestingly, 9 of the top 10 are tech companies, the exception being Berkshire Hathaway, an investment company whose single biggest investment is Apple, accounting for 40+% of their total portfolio.
These companies demonstrate that there is value hidden in the data and while these companies are expert at releasing this value (and we can debate some of the ethics of this) very few traditional companies are following their lead. You can’t claim to be digital if you are not actively working to leverage data to change the way you do business as leveraging data is the very essence of digital. Worse, this lack of attention and progress on leveraging data is likely leaving significant value on the table and leaving traditional companies vulnerable to new more data intensive business models.
Doing Agile vs Being Agile
Agile – able to move quickly and easily. Or in a business context ……
Agile – being able to understand, adapt, and change quickly in an ever-evolving environment.
Everyone wants to be agile so they can cope with the pace of change. The catch cry of todays businesses is speed, we need to be able to execute with speed. For many they operationalise this as implementing agile work practices. For some this is introducing agile software development methods into software development processes, for others it’s agile right across the IT no matter the scope and nature of work in the teams for yet others it is agile everywhere.
While doing Agile may help with speed there is a lot more to being agile than a new project management method. You also need to:
- Understand and orient to your goal / outcome / purpose / mission. In a digital world you cannot do everything so knowing who you are and how you “intend to win” in the marketplace is paramount. This perspective allows you to proactively choose work for value rather than reacting to market changes driven by competitors. In this context, velocity, progress towards your goal, is much more important than speed per se.
- Design your organisation for adaptability from top to bottom. Traditionally we design our organisations to make management and control as simple as possible. If you wish to be agile you need to design your organisation for adaptability, as needs change we adapt. This includes how you make decisions, how you define responsibilities, how you approve and manage budgets, focusing governance on products and portfolios rather than projects and changing how you organise, lead and measure team success. There is much else you need to consider changing than this list but it’s a start.
- Implement iterative work processes and governance that optimise learning and manages medium term ROI. If the world is changing rapidly we need to be able to adjust often. The best way to do this is through frequent iterative management and work processes that formalise review, learn and adjust processes. Agile work practices do this very well as they are deliberately designed to iterate. That said you can do the same with traditional methods as well if you wish (as I like to joke you can turn your waterfall projects into a series of rapids) but it takes deliberate and non traditional design.
So those are my six trends. Unsurprisingly there is a lot of COVID influence there but also the current impact of some long run trends. I would be interested to hear your feedback on these trends. For example:
- Did these trends impact you?
- What issues or opportunities did they present?
- Will addressing these issues be a focus for 2022?
- What other trends impacted you?
- How did you seek to address these issues?